Reports from the United States Department of Agriculture and Canadian government provided a look at ending stock expectations. India's government also released some supply estimates for pulses that took the market's attention. All of this data is key for market participants, especially as the 2017-18 crop gets going. All the daily fluctuations in the weather and forecasts remain the critical price driver in the near term, but impact of the stock reports cannot be overlooked.
Wheat
Following the snows in Kansas that drove markets higher, prices have settled back on an expectation of a decent (though smaller) crop. The USDA's initial look at new crop supply and demand tables for the U.S. showed an expected drop in ending stocks on lower planted area and yield. 914 million bushels is the expected carry out compared to 2016-17's remarkable 1,159 million bushels.
In the U.S., winter wheat conditions dropped modestly to 53 percent good/excellent from 54 percent last week and 62 percent last year. Spring wheat planting is 54 percent complete versus the five-year pace of 60 percent.
Durum
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Durum prices remain depressed. After months of cheap prices, one would hope that some spring weather and lower planted area would provide a boost to the market. The USDA expects roughly a 10 percent drop in output in the coming crop year, yet prices have not found legs. Planting progress in North Dakota is slightly lagging last year at 24 percent (compared to 26 percent in 2016 and 29 percent for the five-year average).
Canola
For canola, the story is much the same. The soybean oil market's weakness at the Chicago Mercantile Exchange is in contrast with the fundamental tightness of the canola market. Tight supplies as the old crop year is coming to an end are keeping the market on edge. Even with an expected boost in planted acreage (planting in process, obviously) and output set to rise to 21 million metric tons, ending stocks should stay tight on good demand. Manitoba reported 20-25 percent completion in planting efforts, alleviating some fears of significant planting delays.
Peas & Lentils
Seeding of pulses is under way in Canada. Saskatchewan reported 11 percent completion, lagging the five-year average pace of 16 percent. Weather has been warm, allowing farmers to do some field work, but rains have hampered efforts in many areas.
India updated their pulse output estimate for the previous two growing seasons. 22.4 million metric tons of pulses were produced in the rabi and kharif seasons, combined. This is a 37 percent jump from last year and due to a combination of higher acreage, good weather and government support of pulse farmers.
Barley
Barley planting took a big leap forward, going from 32 percent complete last week to 53 percent this week. This still lags the five-year pace of 68 percent, however. 26 percent of the crop has emerged. The USDA provided their first look at the 2017-18 barley balance sheet, and a drop in area and yield is expected to reduce ending stocks (even with a drop in demand) by 25 million bushels.
